Astana – new Financial Bridge between Europe and Asia

The young and ambitious independent Kazakhstan was always famous for originality of the decisions directed to attraction of foreign investors to the country. Creation of the International Financial Center “Astana” (IFCA) did not become an exception, rather confirmed the developed tradition. It turned out the unique project for the CIS country. IFCA has to become a “center”   of attraction of investments into economy of Kazakhstan, by means of own court, arbitration, the exchange and the own regulator.

The organization in the Post-Soviet state of the  financial hub  for Central Asian region, and the hub based on the principles of the English law having preferential tax treatment and independent financial court… Several years ago such a project could be considered as exclusively fantastic. However no one can deny this fact.

As it is accepted in this country the president of the republic Nursultan Nazarbayev is the initiator and the main organizer of IFCA. During one of the public statements “The plan of the Nation 100 steps for 5 institutional reforms” he voiced the extraordinary idea – to create IFCA in Astana on the basis of infrastructure of ASTANA EXPO 2017. A reference point became the similar center in Dubai. 

– Fixing of the special legal status of financial center in the Constitution, formation of the center as a financial hub for the CIS countries and also a whole region of the Western and Central Asia, – the Kazakhstan leader approximately designated priorities this way, having fixed existence of  IFCA by the necessary decree. – Creation of the independent judicial system with own jurisdiction which will function on the principles of the English law. The judiciary is formed of foreign experts. In the long term the financial hub of Kazakhstan has to enter into 20 advanced financial centers of the world.

The rest became, figuratively speaking a trick. During the official visit of Nazarbayev to Great Britain the President of Kazakhstan met Jacob Rothschild (the person does not need introduction!). In couple of days the Kazakhstan parliament set the status of IFCA legislatively. And almost a year ago, in January, 2018 the International Financial Center “Astana” received official start.

What is IFCA attractive to foreign investors for? First of all, the most unprecedented preferential terms in the region, including the independent financial regulation based on the international standards. Key posts are given to the British – to recognized experts on law and international law. The system of the English justice is known around the world, and official London is recognized by the international legal center. Thus, this aspect is a guarantee of impartial and fair legal proceedings.

 Besides, the particular legal regime which is not depending on the judicial system of Kazakhstan, based only on the principles of English law is fixed in IFCA. English is recognized as official language of office-work on the territory of IFCA. The status of judges of IFCA guaranteeing protection of the rights and the interests of foreign investors attracts attention and it emphasizes aspiration of Kazakhstan to obtaining faultless image and creating favorable conditions for work of the large multinational companies.

The list of privileges for investors can be listed long. These are tax preferences for a period of 50 years – participants of IFCA are exempted from payment of IIT and CIT till January 1, 2066, etc. It is also a simplified visa and labor regime. Foreign workers of IFCA, as well as members of their families, receive the entry visa valid up to 5 years. Citizens of the countries of OECD, the UAE, Malaysia, Singapore, Monaco and also the countries determined by the government of Kazakhstan have the right for visa-free entrance for up to 30 calendar days. And a small, but pleasant bonus is free rent of offices of class “A” in the first two years of work.

Kazakhstan shows maximum loyalty to foreign investors, and creation of favorable investment climate became one of political and economic priorities. For the solution of problems of foreign businessmen in the country at the beginning even the special Ministry for Investments and Development was created thanks to its activity, receiving public services for investors became simpler as much as possible and administrative barriers decreased. It safely worked up to the end of last year, and, having carried out the task, was reorganized. The remained functions and powers were delegated to the Ministry of National economy and the MFA of RK. If to add diplomatic multifactor policy to which all these years the president Nazarbayev adheres then it is absolutely no wonder that the Kazakhstan offers are in considerable demand, and foreign visits and summits in Astana come to an end with enterprise forums and the conclusion of new contracts.

The result is available too. In IFCA even before its opening more than 55 companies were registered. According to the managing director of the International financial center “Astana” Kayrat Kelimbetov, till 2020 the number has to exceed 500 companies.

– For us a key performance indicator, considering that we do not collect taxes on financial institutes will be a volume of the involved foreign investments, – Kelimbetov says. – We consider that it is common sense. These investments would never come to Kazakhstan. Tens of billions of dollars of investments, is a creation of new jobs, increase in purchasing demand in our country, and for us it will be great advantage.

According to the prime minister of the country Bakytzhan Sagintayev which he sounded at a plenary session of the forum Astana Finance Days, IFCA will considerably expand the international opportunities of Kazakhstan, will allow it to find and take the place in the general developed scheme.

– Kazakhstan considers IFCA as a part of a world financial system, – the head of the government notes. – The global chain of the financial centers managing world cash flows passes almost through the whole globe — from Toronto to Sydney and from Tokyo to New York. Each of them has the niche.

In its turn IFCA, having a unique geographical location, will give vent to the markets of Central Asia, the Eurasian Economic Union, Transcaucasia, the countries of the Middle East.

– Astana is one of key links of new transcontinental routes of a global initiative “Belts and Ways”, – Sagintayev reminds. – Therefore IFCA will become the natural financial and economic bridge between the Western China, Mongolia and the countries of Europe. All this opens access to the huge market of more than 1 billion people.

Meanwhile, the western expert circles also support the idea that in the world the new financial bridge between Europe and Asia appeared. According to preliminary forecasts of the Kazakh authorities, IFCA will be able to attract billion investments into national economy. Plans of Kazakhstan are estimated, of course, as grandiose, but, considering present conditions, quite feasible. Astana understands well that the competition for investors amplifies every day, and only the perspective product meeting the requirements of modern realities of world economy will be able to attract investments. Kazakhstan should correspond.